Musings on the Detroit Auto Show – Forbes
I have spent the last few days at the Detroit Auto Show. Despite the inroads that have been made by the shows in New York and Los Angeles, this is still—by far—the most important US auto show. Detroit has the most concept cars, the most new product introductions, and the largest media presence from both North America and around the world.
Given the show’s stature, it is no surprise that the most frequent question I get after attending about runs along the lines of the car I liked the most, or the car that was most important, etc. (Car being assumed to refer to any vehicle type.)
This is actually getting to be a harder and harder question to answer. It is not that there aren’t some great vehicles on display—it is that there are so many. (More on that in a moment.)
If pressed to pick a vehicle from this show, I would go with the new Ford F-150. First, because it is perennially the bestselling vehicle in America—so it is a vehicle that matters. Second, Ford had the courage to use aluminum in the building of the vehicle. Aluminum saves weight-a lot in this case, which really helps handling and fuel economy. But aluminum is also hard to work with and adds to costs. So the F-150 is an aggressive product play. Judging from the examples on display, I’d say it will pay off for Ford in a big way. (Assuming the costs are kept in line and the price isn’t too high.)
My runner up to the F-150 is the new Hyundai Genesis. With the original Genesis, Hyundai made a huge step up in terms of pricing, content, and features. It was well received in the marketplace and the new Genesis shows that the first version was no fluke—it is another big step forward for Hyundai. (Other car companies are right to be nervous about Hyundai.)
In terms of shear “wow” factor, I would vote for the new Porsche Porsche 911 Targa. The original Targa had a folding soft top that was removed and stowed manually. The latest Targa has a similar look and soft top, but this time it is removed and stowed with a fully automated display of engineering wizardry right out of a Transformers movie. (Although no special effects are involved.) Very cool.
As I mention earlier, it is much harder than it used to be to pick a clearly “best” car. The truth is that all cars (and trucks) today are by any kind of historical standards really good. For example, look at engines: Not long ago deciding between a 4, 6 or 8 cylinder engine meant deciding between roughness, power and fuel economy. Today, V8 engines offer the fuel economy of yesterday’s 4 cylinder engines. And 4 cylinder engines offer the smoothness and power of yesterday’s V8s. So much that many buyers today aren’t even aware of the number of cylinders under the hood of their new vehicle.
It is not just engines. Many of the vehicle attributes that served as differentiators in the past really aren’t that meaningful anymore. Today, all cars deliver plenty of horsepower. All cars have a good braking distance and handle predictability. If you are in an accident, all cars offer generally the same level of survivability or injury protection. We can still measure quality differences, but only when scaled at 100+ vehicles. On an individual vehicle basis, these differences are not significant.
This is not to say that all vehicles today are the same. They are not and car companies in fact struggle mightily to make their offerings as different (and desirable) as possible. But we are experiencing a fundamental marketplace transition in terms of how consumers think about, evaluate, and relate to these differences. In some ways, car companies are leading this transition—in others they are under pressure to keep up.
What is driving this transition is technology.
When I step back, the biggest take away from the Detroit Auto Show isn’t a single vehicle. It is the role that advanced technologies are playing in driving traditional differentiators like safety, quality, and performance to near parity. And it is the role that technology is playing in creating new potential points of differentiation—points that offer both a challenge and opportunity for auto makers.
For example, while achieving further gains in accident survivability may be hard to achieve, there is a new emphasis on accident avoidance. This is a very good thing—why worry and stuff more airbags into a vehicle when you can use technology to help avoid having an accident in the first place?
The shift from accident survival to accident avoidance has been gathering pace and the Detroit Auto Show featured a blizzard of active safety announcements. (All of which I see as stepping stones toward an eventual self-driving vehicle.) One good example is the new Mercedes C-Class which—among its arsenal of other safety technologies—now allows the driver to set a mode where the car automatically paces and follows the vehicle in front. (A feature I will playfully label “lemming mode.”)
Technology is also powering gains in both fuel efficiency AND performance even for vehicles powered with a traditional internal combustion engine. This means—at least so far—today’s consumers are able to get both higher performance and lower fuel bills when they look for a new vehicle. I say so far as I suspect we will probably need to test the limits of this win-win as fuel economy standards rise aggressively later in the decade. This could suggest some trouble ahead as standards and vehicle prices rise in an era of lower fuel costs. (More on this in an upcoming post.)
Finally, car companies are rolling out (at last) a whole range of connectivity and entertainment options which are both highly desired by today’s car buyers. (Consumers expect to be as connected inside their vehicle as they are outside). Ford and others have taken some knocks for earlier versions of these features, but the car companies latest offerings are showing they are learning from earlier miss-steps.
Technology is enabling a transformation in vehicle functions and features, but auto makers must still figure out which of these to offer in ways that are novel and that consumers truly value. I mentioned earlier the Porsche Targa and its Transformer-like top. (Detroit Auto Show visitors seeing this in action could be heard literally to say “wow”!) Another example is again the new C-class, this time with its use of a dramatically placed iPod-like infotainment display.
As I left the auto show, it seems clear that over the next few years vehicles will be less and less about simple transportation and become more about comprehensive extensions of our lives. How this will all play out will be interesting to watch, but my guess is we ain’t seen nothing yet.